Myths Vs. Facts: How Does the Affordable Care Act Affect Employers and Consumers?

The Patient Protection and Affordable Care Act (ACA) seeks to fix a nearly broken health care system by making quality health care accessible and affordable. Signed into law in 2010 by President Barack Obama, the ACA includes a series of mandates, subsidies and insurance exchanges to ensure that everyone has access to coverage, regardless of gender or pre-existing conditions.

Partisan political wrangling over “Obamacare” resulted last week in a partial government shutdown that is still in effect. The budget stalemate aside, significant portions of the ACA are expected to become law in January 2014, including:

  • Coverage eligibility for patients with pre-existing conditions;
  • An individual mandate requiring those not covered by an employer or government program to purchase coverage or pay a fine;
  • Online health care exchanges allowing consumers to compare benefits and prices; and
  • The availability of coverage subsidies for eligible individuals.

In an effort to separate the facts of the complex act from the myths, Anthem turned to Donna Losch, senior vice president and benefits consultant for Brown & Brown of Washington. Brown & Brown—through The Trust—offers competitive benefits packages, featuring options from numerous insurers, to Northwest financial institutions.

Below you’ll find the Obamacare: Myths vs. Facts.

Myth: As a consumer, I don’t need to pay for coverage now. I can just wait, and if something happens, they have to give me coverage.

Fact: Part of what you need to consider is that the individual mandate requires you to find coverage. So when you file a tax return, if you have not acquired health care benefits, you’re penalized. The fine may not seem high to you -– it’s $95 per person or 1 percent of household income, whichever is greater. However, that fine will be deducted from your federal tax refund or added to what you owe the Internal Revenue Service.

Here is another thing for consumers to consider: For anything that’s urgent, you won’t get coverage approval immediately. Once you are approved, your coverage is not retroactive to the day your emergency happened, and you could still be liable for costs resulting from catastrophic events, unplanned events or surgery—things you may not be able to predict.

As a consumer, you absolutely do need coverage, because one visit to the emergency room can easily set you back $3,000-$4,000. One night’s stay in a hospital, if you’re admitted through the emergency room, can cost more than $10,000, depending on the treatment needed. Those expenses are still your responsibility, unless you are covered.

Myth: Employers are simply going to drop their employees’ coverage. Businesses with fewer than 50 employees are exempt from fines, and for larger employers, the fines may be less expensive than providing coverage.

Fact: There was certainly speculation to that effect during the initial saber rattling over ACA. What has actually transpired is that very few employers dropped coverage. Employers were not required to provide benefits before the ACA, but made the choice to do so for a number of reasons. It’s the right thing to do, for one thing, and it helped companies recruit and retain good people. If people are ill or have sick family members, it causes absenteeism, and that affects a company’s performance. That didn’t change when the ACA was signed into law.

Myth: The ACA requires that businesses with more than 50 employees who are working 30 hours or more per week to provide benefits or face steep fines. So, this must mean employers are going to cut part-time workers’ hours to avoid those costs.

Fact: That has been seen in some industries, maybe in some restaurants or in seasonal industries, but we are not seeing it with typical full-time staff.

Myth: The state Exchanges are better than private coverage.

Fact: Exchanges are electronic online marketplaces, but the choices are very similar to plan choices in the historical or “paper” market. Exchanges are available to individuals and families only, and are the only place where government subsidies are available. No subsidies can be requested through a private plan. The Trust and any association plan is for the employer market; they offer many competitively priced, quality options that employers can offer to their employees.

Editor’s note: Donna Losch will help credit unions to better understand pending and long-term issues surrounding health care reform during two sessions at the Amplify Convention in Portland this week. On Wednesday, Losch will present “Health Care Reform—What is the Real Story Now?” That session guides credit unions through changes on the health care horizon that can impact the costs and plan designs offered to employees in the short and long term. On Thursday, she will take a deeper dive into “What Employers Need to Know and Do Now.” Attendees don’t have to be current clients of The Trust to attend the sessions.

In addition, credit unions wanting to know more about how to prepare for the state Exchanges are invited to register for a free webinar that Losch will offer on Nov. 14 from 10–11 a.m.

 

Questions? Contact Gary Stein: 503.350.2216, gstein@nwcua.org.

Posted in Federal.